FINRA Series 24 - General Securities Principal Practice Test

To be eligible for the Series 24, a candidate must first pass the Securities Industry Essentials (SIE) exam and one of the following representative-level exams: the Series 7 (General Securities Representative), Series 79 (Investment Banking Representative), or Series 82 (Private Securities Offerings Representative). The SIE and the representative exam can be taken in any order, but both must be passed before the Series 24 results will be finalized.

The Series 24 grants broad supervisory authority over most investment banking and securities business activities. A holder can supervise: trading and market making, retail and institutional sales, underwriting, advertising, compliance, and the financing of customer accounts. However, it does NOT authorize supervision of activities requiring specialized principal licenses, such as the Series 26 (Investment Company and Variable Contracts Products), Series 27 (Financial and Operations Principal), or Series 53 (Municipal Securities Principal).

The Series 24 is a broader, more comprehensive principal license. While the Series 9/10 combination focuses specifically on the supervision of sales activities (retail and institutional) and options, the Series 24 adds critical authority over investment banking, underwriting, trading, and market-making activities. The Series 24 is often required for branch office managers with full P&L responsibility (OSJ Managers), whereas the Series 9/10 may suffice for sales managers in a larger OSJ's satellite branch.

This section is heavily tested and focuses on the core financial safeguards of the industry. Key topics include: the Customer Protection Rule (Rule 15c3-3) and reserve formula calculations, the Net Capital Rule (Rule 15c3-1), account documentation and approval (including for discretionary accounts), handling of customer complaints, credit regulation (Regulation T), and the safeguarding of customer funds and securities. Understanding the 'why' behind these rules is as important as knowing their mechanics.

The Series 24 is a 3-hour and 45-minute exam consisting of 150 multiple-choice questions (plus 10 additional unscored pretest questions). The passing score is 70%. The questions are a mix of factual recall, definition-based, and complex, scenario-based items that require application of rules to specific supervisory situations.